2 Responses to “Lower gas prices, Um...Election trick?”

No, it's not rigged. A natural series of events has caused the price to go down. the first is that supply has decreased. With the price of oil increasing, Amercians and others have driven substantially less over the summer. With the economy shrinking, factories in China and elsewhere have decreased output, further limiting the demand.

Also, speculators and hedge funds have exited the market which has also reduced the price on oil. I have heard that $35 - $40 a barrel was speculation.

In fact, you hear OPEC cutting supply to try to raise price. Also, I am wondering about Canadian sand oil if we break $60. At a certain price point, Canada will stop producing sand oil and shale (sp?) oil in the US will not be profitable.

To add, G.W. Bush was also hoarding oil to restore our strategic oil reserve at the cost of agitating the already high oil prices at the time. That was roughly 60 million barrels a day. But now that the oil reserve is near 100%, the hoarding has since stopped.

But the biggest thing is what merch mentioned: A combination of economic contraction and the loss of oil speculation.

I've been ranting for a while that the oil price was unsustainable, and that the bubble was going to burst any minute. That was a few months ago. (It was brought up because someone believed that oil was the key commodity to buy into at that time.)

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